All Forum Posts by: JD Martin

I would not be too dogmatic with the credit score. Sad to say, but half the people you see walking around have wrecked credit scores. My father sold cars all his life (retired) and the last 10 years or so selling told me that if they (the dealership) didn't sell cars to people with wrecked credit and horrendous scores, they wouldn't sell any cars, period. 

I consider the score and the items on the score, along with stability of job and level of income as a whole. I do not rent to anyone with an eviction and probably not to anyone with a felony conviction, though I suppose I might consider what it is. But I live in a fairly jumping market, and price my units a little below market and can be picky. 

How I would determine it: if the unit tends to be difficult to rent; if it attracts the kind of renters I try to avoid; if I could easily replace it at a lower price and make a significant profit from selling it; if I had too many units or was tired of dealing with that particular unit (high maintenance, for example). 

It would be difficult for me to sell my units to tenants because it would be hard for me to replace them at similar prices. If I bought a unit at 40k and sell it for 80k, great, but not if I need to spend 70k+ to replace the unit with something similar. That's where long-term hold works in your favor when you want to divest, and against you if you want to stay in the game. 

Most tenants that ask if you would be willing to sell are not serious buyers IMO; otherwise, they would already be in a house. This paints a broad swath, I know, but a lot of people are renters because they have an inability to hold on to sums of money long enough to have a down payment on a house, pay for repairs and maintenance, and do the other things that come along with the responsibility of owning a home. If we were all part of Aesop (or was it Grimm?), renters would usually be grasshoppers, and landlords/property owners would be ants. 

I have a question I don't see here: what is the level/amount of your late fees? I'm guessing 10% ($120)? That may be how your lease is written but it sounds excessive, as most states that have weighed in by law on late fees cap it at 5%. You may want to review your late fee structure to make sure it would seem reasonable if you had to go into court to collect those fees. Some states will actually award money to the tenants if the court agrees that the late fee is egregious. 

My title company sends me the HUD statement a couple of days before the closing. I have caught errors twice, both that were not in my favor. One was a $1000 failure to account for earnest money. So yes, absolutely, double-check everything.

Unless you are purchasing a house to live in while you are going to school, I would think that any other type of "speculative" use of that money would be fraudulent. Who subsidizes the loans, and is flipping homes, purchasing rental property, or other business-oriented activities a permissible use of the funds? My guess is probably not, so from a purely ethical point of view I would say you shouldn't do it, and you shouldn't suggest that you are thinking of doing it on a public forum using your name. Unless of course the student loan program there allows investor real estate purchasing. 

You could "get a job" while you are going to school, compile money and speculate in that fashion. 

First, I would start the eviction process immediately. You do have in your lease that the tenant is responsible for utilities, right? If you have no lease, then you just get them started giving them the boot. Second, I would lose the power to the receptacles, even temporarily, even if I had to pull the breaker or have an electrician disconnect the feed. Third, I would let the guy know that stealing utilities is a crime (everywhere I know of in the US) and any further attempt at doing so you will simply contact the utility company, who can get a citation or arrest issued to the guy. 

Someone who will resort to that length is going to be no good. I once knew of a situation where a tenant who had their water cut off ran a water hose with dual female couplings from their neighbor's house to theirs at night and fed their house with water the neighbor was paying for, until the cops caught them one night. I would have more sympathy for the guy who sat there in the dark because he couldn't afford rent and utilities, than to someone who just decides to steal what they won't pay for (starving people in third-world countries without money stealing food excepted). 

Depends on whether you want to increase your rental holdings or not. If so, you should work some of the equity out of the other house and pick up another home or two that cash-flow like what you have now. Being completely risk-averse means you will have to really bust it out to earn everything you can financially from your back (or mind, as it may be), and I would actually say you're not that risk-averse as you already hold one rental property that is not paid for. 

If you're looking for the best multiplier of the funds you have in the paid-for house, purchasing two or three other units would make the most sense. If you want to have the least possible payments per month, then you would probably sell the other house, pay off the rental and use the remainder to put a larger down payment on the house you're moving to. 

How long until their lease is up? If you are less than 30 days out, I would just wait them out. I think it's difficult showing units with tenants in them anyway, as they rarely decorate or keep the place the way you would if you were showing it to prospects. I wouldn't do her any favors on the way out, though. Besides, waiting until the tenant is out gives you a chance to do minor repairs, paint touch-up, and the other things that makes a place show at its best. 

If you are located somewhere that you need all the time you can get because getting new tenants is difficult, you have a structural issue that can't really be solved by just showing the place a little earlier with someone inside. 

I don't allow smoking of any type in my properties - not cigarettes, cigars, pipes, e-cigs, vapes, pot, whatever. The only smoke that should be in one of my properties is from a burned pot roast. Reason is because tobacco smoke (and pot smoke, too) is extremely difficult to get out of a unit and, given that 80%+ of the population doesn't smoke, makes the unit very difficult to re-rent to a non-smoker without total rehab. Non-smokers can smell a unit that has been smoked in, even just once in a while, like a hound can smell an escaped convict. 

I do allow smoking outside, as it would be difficult to enforce otherwise. But as to your question as to when/how smokers got such a bad rap? Next time you are at a traffic light, try to count the number of cigarette butts at the curbside, and you'll get a little more illumination :)  . BTW, I am a former smoker, been quit 20 years, and I generally like hanging out with smokers more than pious holier-than-thou non-smokers, but that doesn't mean I'm blind to the fact that a lot of smokers are just plain pigs. 

I suppose I would move. Why stay somewhere that the landlord doesn't take care of the place when there's plenty of rental properties out there?